Aggregate Demand and Aggregate Supply 6

Aggregate Demand and Aggregate Supply 6 - 5 Determinants of...

This preview shows page 1 - 2 out of 2 pages.

Image of page 1

Subscribe to view the full document.

Image of page 2

Unformatted text preview: 5. Determinants of aggregate supply The following graph shows an increase in short—run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the short—run aggregate supply curve shifts to the right from A51 to 145;, causing the quantity of output supplied at a price level of 100 to rise from $200 billion to $250 billion. EDI] 1T5 15f] 125 11:11:] ---------+I- I I PRICE LEVEL T5 5{] 25 -----+ {1 ED 1DE| 15D 2m] 25D 3m] 35H 4m] QUANTITY OF OUTPUT The following table lists several determinants of short-run aggregate supply. Fiii in the tabie by indicating the changes in the determinants necessary to increase short—run aggregate suppiy. Change Needed to Increase AS Inflalion expectations Lower 11’ Tax rates Decrease 1' Technology Improves 1/ fiPoints:—1,r'1 ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern